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Commitments
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9 Months Ended |
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Mar. 31, 2013
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| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments |
Note 11 - Commitments and Contingencies
Refer to Note 10 - Commitments, of the Notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended June 30, 2012, for information on all commitments.
In September 2011, the Company entered into a Purchase and Sale Agreement (the "Nautilus PSA") among the Company and the non-controlling interest owners of NP for the Company's acquisition of the sellers' interests in NP (the "Nautilus Transaction"). The Nautilus PSA provides for potential future contingent production payments, payable by the Company in cash to the sellers, of up to a total of $5.0 million if certain increased average daily production milestones for the underlying properties are achieved. J. Thomas Wilson, a director and executive officer of the Company, has an approximately 52% interest in such contingent payments. See Note 5 above for information regarding the estimated discounted fair value of the future contingent consideration payable related to the Nautilus Transaction.
On August 28, 2012, Stratex Oil & Gas Holdings, Inc. ("Stratex"), announced an unsolicited proposal for the acquisition of the Company's common stock (the "Stratex Announcement"). On September 10, 2012, the Company announced that its Board of Directors, after carefully considering the unsolicited proposal, had determined not to pursue the Stratex proposal. On September 12, 2012, the Company received a subpoena from the U.S. Securities and Exchange Commission (the "SEC") for the production of documents in connection with these announcements. On September 14, 2012, the Company received a letter from the Financial Industry Regulatory Authority ("FINRA") stating that FINRA was conducting a review of trading in the Company's common stock surrounding the August 28, 2012, Stratex Announcement and requesting information and documents from the Company in connection therewith. The Company cooperated with FINRA's requests, and on April 30, 2013, the Company received a letter from FINRA stating that their review had been completed, and FINRA had made its recommendation for whatever action, if any, to the SEC. The Company has not received any substantive correspondence from the SEC since September 2012.
The Company has estimated that there is the potential for a statutory liability of approximately $1.0 million of required U.S. Federal tax withholdings related to the Collateral Agreement as described in Note 8. As a result, as of March 31, 2013, we have recorded a total liability of $1.0 million under accrued and other liabilities in the unaudited condensed consolidated balance sheet included in this report. The Company is in the process of addressing its U.S. Federal tax withholdings requirements. The Company has a legally enforceable right to collect from Sopak any amounts owed to the IRS as a result of the Collateral Agreement. As a result, we have recorded a corresponding receivable under prepaid and other assets in the unaudited condensed consolidated balance sheet of $1.0 million.
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